All-party committee to meet Thursday AM in Edmonton to debate MLA pension

CALGARY, AB: The Canadian Taxpayers Federation (CTF) called on the all-party Members’ Services Committee to reject a proposal to reinstitute a gold-plated pension plan for Alberta politicians, scheduled to be discussed at a meeting this morning.

MLAs on the committee appear to be giving serious consideration to a gold-plated “targeted-benefit” pension plan.  A “targeted-benefit” pension plan creates the option for MLAs to reduce their pension payouts when there’s not enough money in the pension fund.
 
“The only difference between a gold-plated ‘defined-benefit’ pension plan and a gold-plated ‘targeted-benefit’ pension plan is that with the former, taxpayers are automatically dinged for shortfalls, and with the latter, they have the option of either handing taxpayers a bill for the shortfall or reducing their payouts,” said CTF Alberta Director, Derek Fildebrandt. “Does anyone honestly believe that MLAs would vote to slash their own pensions, instead of forcing taxpayers to cover the gap?”

The CTF has been campaigning federally and in the provinces to see the elimination of gold-plated pension plans for both MPs and MLAs.

“Their timing is impeccable – just as federal MPs are buckling under the pressure and are preparing to scale back their own over-the-top pensions, some Alberta MLAs are rubbing their hands together at the prospect of getting in on the action themselves.”

Using the formula proposed by Justice Major, the MLA pension plan would see a two-term backbench MLA with no extra duties entitled to an annual, indexed pension of $32,000 a year for life. A three-term MLA would be entitled to $53,000 annually. That three-term MLA would need to contribute $203,000 towards their pension fund, while a private citizen would need to save at least $822,000 in RRSPs to buy the same pension. 

The CTF has proposed a $1 for $1 matching RRSP-style (defined-contribution) pension plan for Alberta’s MLAs.

More CTF calculations on the proposed MLA pension plan can be found here: /media/MLA%20pension%20calculations%20%28May%2028,%202012%29.pdf

CTF Alberta Director, Derek Fildebrandt will be at the meeting of the Members’ Services Committee in Edmonton today to observe its proceedings.